A league of its own

ColoradoBiz, May, 2008 by Stewart Schley

Remember the George Carlin routine about the differences between baseball and football?

"Football has hitting, clipping, spearing, piling on, personal fouls, late hitting and unnecessary roughness," Carlin would say. And then he'd pause, and purr quietly into the microphone that baseball has "the sacrifice."

It's a classic bit that goes on and on. But while the nation's pastime may be the more pastoral and gentler of the two sports, in the field of sports business, Major League Baseball is about to clobber the rough-and-tumble NFL over the head with a Louisville Slugger.

It all has to do with the modern-day sports trend of designing entire television networks around particular professional leagues. The NFL has The NFL Network, the NBA has NBA TV and the hockey guys have NHL Network. Next January, baseball finally catches up, with the MLB Network. It's late to the game, but baseball is about to show the other guys how it's done.

When it hits the "on" switch next winter, MLB Network will be available immediately to around 50 million cable and satellite TV subscribers, making it not just the biggest network launch in sports-TV history, but as the industry newspaper SportsBusiness Journal recently put it, "the most successful launch in cable TV history."

Go figure. Who knew the likes of MLB commissioner Bud Selig, a reed-thin car dealer from Wisconsin, would be fit to yell "scoreboard" in the face of a big, bad NFL, which badly overestimated subscriber goals for its television network?

Some background: In today's television environment, the hub around which the rest of the economics twirl is distribution. To succeed, networks need to convince cable and satellite TV companies like Colorado's Comcast and DISH Network to give up a place on the dial (or the remote control). Otherwise, nobody can watch.

That's where baseball came up with a strategy that it executed every bit as adroitly as a perfectly rendered squeeze play. Here's how it went: Before launching MLB Network, baseball owners invented something called "Extra Innings." It's a package of out-of-market games you can watch for an extra fee. In other words, if you love the Washington Nationals but live in Salida, you can still catch most of their games on "Extra Innings."

There's nothing novel there: Football has offered a fan-satisfying package of games called "NFL Sunday Ticket" for years, giving die-hard Chicago Bears fans (and fantasy football zealots) something to do on Sundays in Colorado besides watch the Broncos. The rub is this: "Sunday Ticket" is available only in one place, from the satellite TV broadcaster DirecTV. (It's owned by suburban Denver's Liberty Media Corp.)

When baseball's cable deals for "Extra Innings" expired last year, the league planned to mimic the NFL by working out a new, exclusive arrangement with DirecTV. Howls of protest started almost immediately. Cable companies cried "foul," draping their parochial business interests in the language of Americana, apple pie and baseball. Congress caught the fever, too, demanding that baseball rethink its exclusive approach.

That was when baseball got smart. Rather than merely cave to the pressure, MLB executives offered up a business quid pro quo. They opened up "Innings" to every cable company in the land, in exchange for commitments by those same companies (Comcast among them) to offer the full-blown MLB TV network next year to most of their subscribers on some of the most widely watched packages of channels.

In the end, access to the "Innings" package was the hanging curveball MLB lobbed in front of the nation's biggest TV distributors to get what baseball wanted--lots of distribution for its new TV network. When it launches next January, MLB TV will reach nearly 10 million more households than the NFL Network can boast after three years.

Baseball, as George Carlin opined, may be the game that offers up a "picnic feeling," but in the modern TV ecosystem, it's proving it can play with the big boys.

Stewart Schley writes about sports, media and technology from Englewood. Read this and Schley's past columns on the Web at cobizmag.com and e-mail him at ss_edit@comcast.net

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